US Dollar Slides Ahead of NFP

The US Dollar fell as a result of profit taking by investors as they await today’s release of the US Department of Labor private sector jobs report for April. Data shows that over the past two weeks the greenback has erased all of this year’s losses on expectations of a rate increase from the US Federal Reserve Bank. Currency strategists say that any additional gains will be driven by data evidencing continued economic growth and rising inflation. Analysts believe that that could force the Fed’s hand with several more rate increases this year.

As reported at 10:48 am (JST) in Tokyo, the USD/JPY was trading at 109.13 Yen, down 0.05%; the pair earlier hit a trough of 109.099 Yen while the high for the session is at 109.235. The AUD/USD is trading at $0.7555, a gain of 0.33% while the NZD/USD is trading at $0.7053, a gain of 0.1159%.

NFP Could Force Fed’s Hand

Economists are currently forecasting April NFP figures to have shown 192,000 new jobs added, against 103,000 in March. Average hourly earnings is predicted to remain flat at 2.7% (year-over-year) while the unemployment rate is likely to fall to 4.0% from the current 4.1%. The Federal Reserve Bank has a dual mandate to ensure price stability and full employment. The recent rise in CPI led the Fed to express confidence that their inflation target would be met thus a June rate increase could be on the table.

Barbara Zigah is a freelance journalist living in Ghana, who specializes in Forex-related content; her online work has appeared in the IB Times, NASDAQ, Benzinga, and Seeking Alpha.